Telco wars are showing signs of heating up further with Mukesh Ambani's Reliance Jio bidding for the assets of sibling Anil Ambani's Reliance Communication in an attempt to block rival Bharti Airtel, a media report says. Top mobile service provider by market share, Jio, and third-placed Airtel are eyeing the spectrum, towers, fibre network and real estate of RCom, which is facing bankruptcy proceedings.
Supreme Court order
Monday was the last day for Reliance Jio Infocomm Ltd and Bharti Airtel Ltd to submit the bids when the ten-day extended period granted by resolution professional Anish Niranjan Nanavaty ended. Bharti Airtel has submitted the bid through Bharti Infratel, in which it holds a 33.57 per cent stake, according to a Livemint report. Airtel had withdrawn an earlier bid to protest Nanavaty's decision to extend the bidding time by ten days on the request of the Mukesh Ambani's company.
This led to the Supreme Court's threat of jail for Anil Ambani, but Mukesh stepped in to meet the obligation and save his brother from going behind the bars.
Among the 40 lenders to the debt-laden Anil Ambani Group company are the State Bank of India, the China Development Bank, and the Industrial and Commercial Bank of China.
Reliance Jio had tried to buy RCom's assets, including the spectrum, 43,000 telecom towers and 1.78-lakh route km of fibre optic network. The deal fell through after the Department of Telecommunications (DoT) refused to greenlight it without a commitment from the elder brother's company to bear past dues on spectrum charges or other fines of RCom.
With the deal aborted, RCom failed to mobilise the required amount to pay off Swedish telecom equipment maker Ericsson to meet the obligation following a Supreme Court order. This led to SC's threat of jail for Anil Ambani. But Mukesh stepped in to meet the obligation and save his brother from going behind the bars.
The resolution professional had in front of him bids from firms, including the Sunil Mittal-controlled Bharti Airtel and Bharti Infratel, and private equity firm Varde Partners by November 13 when the initial deadline elapsed. Reliance Jio sought ten days to make a bid on the last day of the deadline which Nanavaty granted. RCom total secured debt of about ₹33,000 crores.
Adjusted gross revenue order
Anil Ambani resigned as the company's chairman on November 16 along with four other members of the board of directors. But the lenders rejected the resignations on Saturday, requesting Ambani and the other officials to cooperate in the insolvency proceedings before the National Company Law Tribunal (NCLT).
The telco wars are set to roil the sector that is already in doldrums from the SC order on calculating adjusted gross revenues (AGR), although Finance Minister Nirmala Sitharaman has announced some concessions. The order has affected the second biggest telco by market share, Vodafone Idea, the most because of its accumulated licence fees dues and fines.
